Guy St-Julien

[Gold Mines, April 26th, 2001]

moved:

That, in the opinion of this House, the government should table emergency legislation regarding operating assistance for gold mines in Canada, in order to help gold mine operators cope with the rapid increase in production costs, and at the same time guaranteeing a fixed price for the gold they produce.

Madam Speaker, I would like to thank the Liberal member for Shefford, a resource region, for supporting my motion which aims to help gold mines in resource regions.

This motion I am presenting arises primarily from the people at home, in the mining sector and the heads of a number of gold mines in Abitibi—Témiscamingue, mainly in regions such as Chapais and Chibougamau.

Members will remember that in 1948 a debate was held in the House of Commons on the Emergency Gold Mining Assistance Act. A number of members will be intervening, but they should address this emergency measure in their remarks. At home people are asking for help operating gold mines.

If we go back to the 1948 bill people will say it dates from way back, but I have here the text of the law explaining how it worked, including the part on payments as assistance. It is important that people know what it is. I will therefore quote section 3, which reads as follows:

3.(1) The Minister may pay to a person engaged in operating a gold mine a sum not exceeding an amount calculated in the manner prescribed in this section with respect to gold that is produced from the mine during a designated year and that, during the designated year, is sold to Her Majesty at the Royal Canadian Mint or at a branch thereof, or is exported from Canada and sold.

(2) The sum that may be paid under this section in respect of gold produced from a mine and sold in a designated year that does not include any part of the first year of production, is an amount equal to the product of a ) the rate of assistance for the mine for that designated year

multiplied by b ) the number of ounces of gold by which the number produced from the mine and sold in that designated year exceeds two-thirds of the number produced from the mine during the base year.

If we keep going in that vein, a gold vein particularly for Canada's mines, the marginal note for subsection 3(3) specifies that includes a part or all of the first year of production.

On December 1, 1947, a motion was brought before the House which stated:

That it is appropriate to propose a measure to provide emergency payments, by the Minister of Mines and Resources, to help face the increase in production costs of gold produced from gold mines over the past three years, beginning on December 1, 1947.

It says thanks to improvements in terms of the supply of workers and the help with costs provided under the Emergency Gold Mining Assistance Act. We can also go back to another year, 1953, but it is important for people to understand why we are asking for emergency legislation.

We are asking for emergency legislation to help gold mine operators. Over the last several years Canada has passed emergency legislation to help farmers in the west and in the rest of Canada. Emergency legislation was passed to help the fisheries. There has been no emergency legislation to help gold mining since 1976.

A 1953 amendment to the Emergency Gold Mining Assistance Act raised the price paid to eligible miners by one dollar an ounce produced as compared to 1952. These are all elements we saw and we will see again.

In 1960 about half of the gold produced in Canada was sold on the free market and the rest was sold to the Royal Canadian Mint under the Emergency Gold Mining Assistance Act. Gold production in Canada reached the highest levels since the second world war, or 4,628,911 ounces of gold.

It should be pointed out that in 1948 when the Emergency Gold Mining Assistance Act came into force the production of gold rose by 14% as compared to 1947, thanks to these improvements.

Let us now look at 1964. People will think that the mining industry got money every year. In 1964 under the Emergency Gold Mining Assistance Act 44 out of 48 gold mines got help to cover their costs. Those that did not get help had not asked for it.

In 1968 Canadian miners were still selling on the free market or were receiving assistance under the Emergency Gold Mining Assistance Act if they were eligible for this assistance. They were then selling their gold to the Royal Canadian Mint for the Canadian equivalent of $35 U.S. an ounce. The gold bought by the Royal Canadian Mint was in turn sold on the free market.

It is important for people to understand why gold miners must be given assistance through emergency legislation.

In 1968, 35 gold mines were eligible for assistance under the Emergency Gold Mining Assistance Act. Amendments were proposed. In 1972 no mine applied for the assistance available under the emergency legislation because the price of gold on the market was higher than the total of the official price set by the Royal Canadian Mint plus the maximum amount of $48 an ounce provided under the act.

Then in June 1976—we are getting closer to the present—the IMF auctioned off 121.3 tonnes of gold from its reserves. This was the first portion of the 777.6 tonnes or 25 million ounces of gold it intended to sell over a four year period. The net proceeds were deposited in a trust fund used by the IMF to help developing countries.

The Emergency Gold Mining Assistance Act was no longer invoked as of June 30, 1976. The conditions set out in the legislation no longer applied to the industry.

What happened between 1948 and 1976? Under the emergency act passed in 1948 the amounts paid up to gold mine operators while the legislation was in effect totalled $303,104,402 for 1,922.6 tonnes of gold. This means that 61,813,545 ounces of gold were produced and sold in accordance with the act.

What is happening now? In the last two years we have seen a sharp decline in the mining industry, particularly in the gold mines in the Abitibi. We know that things have not been easy for the mining industry, especially in the last two years. Last year low gold prices had a negative impact on the Beaufor gold mine, the McWatters mine, which is called the McWatters Company, and several northern communities. McWatters is developing what is known as the Sigma-Lamaque mine in Val-d'Or.

As I said earlier, hon. members would like to have a debate on this emergency bill like the one that was held some time in the last few months on disaster relief for western farmers because it is important to find a way to help out the mining industry.

As members know, there are many policies supporting the mining industry. We also know that since 1980 Canada's policy has been to sell some of its official gold holdings. The government has opted for progressive and controlled sales in order to reduce as much as possible the impact on the markets. Since gold is not as liquid as other assets and has a low yield our policy has been to increase the yield of Canadian holdings and their liquidity.

People tell us “You are selling gold but that does not help us”. I did a little research which shows that Canada's overall annual sales of gold, which represented 800,000 ounces of gold in 1999 and 600,000 ounces in 2000, are far from significant and important compared to all the transactions conducted on the international markets, where 6 million to 7 million ounces of gold are sold daily. The sale of Canada's gold has been to the federal government's advantage.

However I am deeply concerned by the slump in the gold market and its negative impact on Canadian gold mining communities.

We know that the Canadian government strategy was to invest in research, innovation, the infrastructure and the improvement of human resources development programs.

I understand that until March of this year there has been no sale of gold and that as of March 31 Canadian gold holdings were at 1.2 million ounces. This evaluation is based on the March 31, 2001, London afternoon fixing at $257.70 U.S. an ounce. Today it is about $263.

If the trend continues and if we do not enact emergency legislation to help the gold mining industry in the next 2 to 5 years, mines will close and 13 of the 15 that will be affected in Quebec are in the Abitibi. That is unfortunate.

Right now the mining industry in Val-d'Or, Rouyn-Noranda and La Sarre where the Casa Berardi mine is located need help. Mines are now closed, mainly because of gold prices.

The price of gold went up to $300 and then to $400. Now it is holding at $260 or $265. This is why, with the present serious downturn in this sector, I tell the Government of Canada that it is important that it become involved. If it does not become involved, we are leaving people to sit at home. People are unemployed. If we want to lower costs for the family, leaving workers to sit at home is not going to help matters financially. Neither is it going to help matters socially. People want to work.

What we need is a good emergency legislation program like what was done in 1948. The government needs to look at production costs, the price per ounce of gold, and find a way to come to their assistance. People are not asking for millions of dollars. People are asking for help. Action is required. The federal government says that it will not become involved. The infrastructures come under provincial jurisdiction, but Quebec, Ontario and the other provinces in Canada are helping the mining sector.

I understand that there are transfers but I will not play the transfer game. I will not play along with the provinces. They are getting involved. We should get involved directly with our provincial friends, regardless of party lines, regardless of which government is in power.

What is important is miners, their families and the children now caught up in this nightmare. The economy has been in decline for the past two years. A way must be found to help. I believe that the Government of Canada should do something. It already stepped in between 1948 and 1976. The legislation was passed. I do not understand why it has not taken action before now.

The ministers, both the Minister responsible for Economic Development and the Minister of Natural Resources, are working very hard. They are finding all sorts of ways of helping with research and development, but there has to be a direct approach with the province. Solutions must be found. Our senior officials in Ottawa, in their ivory towers, do not understand what is now going on in the northern resource regions.

There are senior officials in Ottawa or in Canada who are like hermits in a monastery. They do not know what is going on in the outside world. That is what is important.

These officials must come and see for themselves. Officials of Economic Development Canada from Montreal do come to our region. When a message is sent from Montreal to Ottawa, to our excellent Liberal ministers who try hard to find solutions, it often happens that senior officials do not pass it on. I have a message for them tonight.

The important thing is to help the mining industry. Let us forget about flag wars. That kind of war can be waged during the election.

For the time being, we are in a deep crisis. It is possible to reach an agreement with the Quebec government and the other governments. We did it for agricultural programs. We did it for the fisheries. Right now, in this great capital, Ottawa, many people should wake up.

They do not know we have gold mines in the Abitibi. They do not know we have gold mines in Val-d'Or and that the mines in Abitibi—Témiscamingue, Chapais and Chibougamau create 7,000 jobs in the Montreal area.

At present we do not perform secondary or tertiary processing because everything is moved out to the big cities. We have nothing against this. About 3,000 or 4,000 jobs are created in the Quebec City area.

It is important to take action right now. We have to find short term solutions. We have to help these workers who have outstanding experience in the gold mines of Val-d'Or, of the Abitibi, of northern Ontario or elsewhere in Canada. We urgently need assistance and direct action just like the farmers and the fishers.

[Petitions, April 25th, 2001]

Mr. Speaker, I am presenting today a petition signed by residents of the city of Val-d'Or, the Vallée de l'Or RCM and workers at McWatters' Sigma-Lamague mine.

The petitioners are asking the government to make the rules governing existing programs more flexible and to ensure they are being used in resource regions.

Therefore, the petitioners call upon parliament to set up a financial assistance program for thin capitalization mines in Quebec's resource regions.

[Resource Industries, April 24th, 2001]

Madam Chairman, I have a question for the member for Manicouagan, which is also a large riding. We are neighbours, since our ridings are adjoining. Together, we cover about, and Quebec is 1,600,000 square kilometres, 1,100,000 square kilometres. I have 800,000 square kilometres and he has some 300,000.

We did talk about the agency. What is important to us, as we said during the election campaign, is what we should have in the resource regions. We know that the mining sector is currently suffering and forestry is also beginning to suffer. A little over a week ago, I travelled to Shefferville with the Secretary of State responsible for the Economic Development Agency of Canada for the Regions of Quebec, the hon. member for Outremont, and we discussed economic development. As members know, things are not easy in resource regions, given the price of metals and so on.

This is why we are trying to find ways to get specific, short term programs, not virtual programs on the Internet and so on, but programs for rural communities. I appreciate the fact that the minister spent the evening with us, because we truly value his excellent remarks.

The federal government must find new ways to co-operate with the Quebec government and with the governments of all the other provinces. We can take action. A few years ago, we had agreements that produced results. Now we do not have anything. We are proud of Montreal, Quebec City, Ottawa and Toronto, because they have major multimedia projects on the Internet.

We are proud. Jobs are being created and we are glad about that. Finally, we should never forget that, whether it is in Lac Saint-Jean, on the North Shore, in Manicouagan or the Gaspé area, jobs are being created. Whether it is in Abitibi or in Montreal, close to 7,000 jobs are created thanks to the mining and forestry industries. The same thing goes for Quebec City.

Money from the Initiative régionale de stratégie de l'Abitibi—Témiscamingue is currently used to help out COREM in Quebec City. We are proud of that, because it will create quality jobs and, in turn, help to support the mining industry.

The hon. member might want to comment on that. We need short term concrete measures to preserve these jobs.

[Resource Industries, April 24th, 2001]

Madam Chairman, the speech by the Liberal member for Chicoutimi—Le Fjord was an excellent one. I am familiar with his work in the House of Commons and I thank him again for having set in motion this emergency debate within the caucus.

He has referred to a development corporation, but a short term one. Tourist resources are also development corporations.

I would like a little more information. When reference is made to tourism, we have both natural and tourism resources in our area.

I have two points I wish to raise. In the short term, how much does a development corporation need to get from the federal government? Second, would the hon. member speak to us of the tourism resources in Saguenay—Lac-Saint-Jean?

[Resource Industries, April 24th, 2001]

Madam Chairman, the hon. member is right, because sometimes it takes three or three and a half months to get an answer. We currently have projects in the regions with universities, but we must wait three months, a month and a half or two months in Montreal, before going to Ottawa and having to wait for another month and a half. It is important to realize that people in the regions want decisions to be made immediately.

I know one thing. If I need $10,000, I go to a bank and if the manager has not given me an answer a week later, I go elsewhere. If we do not get an immediate answer from the bank manager, we find another solution.

The hon. member is right. Perhaps the government should set up CFDCs or an agency to promote economic development for resource regions. Ministers come to the regions, they see things firsthand. However senior public officials do not always do so. They do not always come and they do not know the reality. They should come and spend a month in my region, in Rouyn-Noranda, Val-d'Or or in the area, to see what it is like.

Some do come. I know Jocelyn Jacques, who is from Montreal's CED. He visits the regions and he sees how things are going.

It should not take 30 days to make decisions. Business people want action. It takes three months. This is why, if we have a development agency, we can have it. Our neighbour, Fednor, is a mere 400 feet from the Rouyn-Noranda city limits.

As Richard Desjardins says in his song, they are 400 feet away, but we should get the same thing to develop the forestry sector and all the other sectors, together with the James Bay Cree and the Inuit. They are our partners, but there must be some action in the short term, not in the long term, not during the next election campaign, not in three or four years, but in the short term.

The hon. member is right. A decision will have to be made as quickly as possible regarding economic projects, to help our economy back home.

[Resource Industries, April 24th, 2001]

Madam Chairman, tonight I would also like to thank the minister responsible for northern Ontario, who stayed here all night. It is really appreciated and it is the first time that we have here a committee of the whole in which all parties are taking part, the Bloc Quebecois, the Canadian Alliance, the Progressive Conservative Party, the New Democratic Party and the Liberal Party.

Tonight's debate is a civilized debate. We should be doing this more often, that is finding solutions. We are making friends. The war is still on and I appreciate the comments from the member for Témiscamingue who is still here tonight and who says that we have to co-operate for the well-being of our people. The war is still going on between political parties.

I will share my time with the member for Chicoutimi—Le Fjord. I also appreciate his dedication. What is important is that he is one of the originators within the Liberal caucus in this debate. I want to thank him because we all are people from resource regions.

What matters here tonight is the case of the ridings of Abitibi—Baie-James—Nunavik and Témiscamingue. We know that the economic situation there is now very different from what it was just a short while ago. The economic slowdown is serious in our resource regions. The situation is really bad in Abitibi—Témiscamingue. I have never seen anything like this in my whole life. In the last three years, we are managing a decline. Even the parish priest is depressed on Sundays. Think about it. People are trying to find ways to work. It is not easy. The governments and our ministers are doing a fine job, but that is not quite enough. The Liberal member for Outremont, who is the minister in charge of the economic development agency, is making announcements in CFDCs and in all areas.

There is one thing the government will have to do, and that is to go back to the effective agreements it had with the provinces. We had Quebec-Canada agreements in the mining industry. We could tell that Quebec was in charge. I agree with this, and we should not care which party forms the government. What matters is the taxpayer's money being spent here. We used to have good agreements. It seems that the discussion in Whitehorse brought about changes in provincial jurisdictions. If we have a big mess, everybody should do his part to find solutions.

We know we have problems in the forest and mining industries. The 15 mines that will close in the coming years are all in Abitibi—Témiscamingue. The government knows that. Political affiliation does not matter. In the next 20 months, 1,000 jobs will disappear. We now have a serious crisis on our hands, with the Sigma-Lamaque mine being closed and the Beaufor mine having closed six months ago.

I must point out that solutions need to be found. The government has implemented some things, such as the 15% tax credit on flow-through shares. As the hon. member for Témiscamingue just said, improvement is needed. It is true, improvements must be made. This was a first test for the Minister of Finance. We were pleased that he intervened in October. It is not easy to understand what flow-through shares are. We do know that a tax credit represents an additional 40% deduction the first year.

Coming back to the debate on the mining industry, a way must be found, along with the province of Quebec, to intervene. Authorization from Canada must be sought, because federal transfers are being made.

Abitibi—Témiscamingue represents some 860,000 square kilometres, so things are not easy when it comes to the cost of fuel, raw materials and so on. Everything comes from outside the area, anyway.

There is something else, however. The mining industry has not benefited from the corporate income tax cut that was set out in the last budget. That is what we are hearing from people. Officials of the Quebec Mining Association met with us in our officers and told us that the government had to find a way to give them some tax relief.

As we know, in 1948 Canada passed an emergency act on support for the development of gold mines to help owners of gold mines in Canada deal with the strong increase in production costs and guarantee a stable price for the gold they produced. The government repealed this act on June 30, 1976, because prices had increased. During that period, the federal government had given the mining industry $303 million for 61 million ounces of gold.

If we want to find a new way for the Government of Canada to support the gold mining industry, and we know that with the price of metals this is not easy, maybe we should come back to an emergency act. People say “We will sell gold.” I know that in the month of March of this year, Canada did not sell gold. Last year, we probably sold 900,000 ounces. People say to me “Guy, we will have to stop selling gold. The government should buy it up, keep it”. Such an act could help us to find a way to help our companies.

We must also support the efforts of industries regarding the exploitation of small auriferous deposits or base metal for small and medium size businesses.

Our companies go to South America or other countries and EDC guarantees the loans. This is awkward because it does not guarantee loans in Canada for companies who want to develop a deposit. If we do it for other countries, why not do it here?

When people in resource based regions see that Bombardier gets an interest free loan from the government, they are proud. This is not in our regions, but we are proud for people in Montreal, for all other communities in the south that get contracts from Bombardier; we are happy with that. However what are we doing for the small businesses? People would like to get repayable interest free loans to be able to go on.

I could talk a long time about what we hear from the grassroots. Some members talked earlier about the forest resources. The member for Joliette and the member for Témiscamingue mentioned it, but the quotas also have to be taken into consideration. The quota system really hurt some of the small businesses back home, even well established companies, like Précibois.

What is strange is that we do not even know who has quotas. We are told that this information is confidential. Some people in Toronto have quotas even though they do not have a company, but just a lumber yard. Things are not easy back home. Those who have quotas also have a business, employees, wage ledgers and so on.

We want free trade and I know that Quebec will work hard on this issue because it is an important industry, but the James Bay and Nunavut area that I represent are facing other issues that we will need to address later on. This is a huge region. We have fishery resources.

There are quotas on shrimp. People find it strange that the member of Val-d'Or should talk about quotas on shrimp. I represent the largest riding of all ten Canadian provinces. It covers 802,000 square kilometres, running 2,000 kilometres from north to south. I have 68 mayors to deal with. It is not easy.

It is a constant fight for the economy. Our members are fighting for the economy. Think about families who are fighting to have a salary at the end of the week and who do not have jobs right now. The employees of McWatters and of Beaufor are in this predicament. There are cases like this throughout the mining industry and we are trying to find solutions.

I also talked about the fishing industry, about Atlantic shrimp quotas and about the Inuit in my region.

I have nothing against urban areas, but we should establish a special agency in the resource regions of Abitibi, Témiscamingue, Baie-James—Nunavik, Lac-Saint-Jean and Îles-de-la-Madeleine.

When we talk about a special agency, we would like decisions to be made locally and quickly. I will give the example of the Department of Human Resources Development, where decisions with regard to students are based on 1996 statistics. Today the unemployment rate for young people is 21%, but we are being told that it is 14.8%. Let us get real.

I am telling my government that it must find ways to do something about that. People would like nothing better than to work.

I really liked tonight's debate, and I think the government will listen to us. We must act quickly to find new ways of collaborating with the government of Quebec. That is what politics is all about. People do want to work. Resource regions need help right now. I say it and I will repeat it, they are going through very tough times. Negative growth is worse than a recession.

However, I trust this government and the ministers who work very hard. They are here, they are listening to us. We have surpluses, but we must act without further delay.

[Resource Industries, April 24th, 2001]

Mr. Chairman, I appreciate the comments made by the member for Témiscamingue. It is true that we have not always seen eye to eye. It took an emergency debate for me to call him yesterday afternoon to arrange a meeting. Together, we found some solutions in the best interest of the people of Témiscamingue and Abitibi. That is the only thing that matters.

He made a point about deep wells. In Quebec there is a program to provide assistance to mining companies developing deep wells and Quebec is the only one financing this program. Not to mention that the 13 mines scheduled to close within five years are located in Abitibi and northern Quebec. That is where the problem lies.

I would like to ask the member a question about exploration and another one about the R and D activities carried out at UQUAT, in Rouyn-Noranda, Val-d'Or, Duparquet and Amos. Could he tell us about this provincial program? Should the federal government get involved with the province in such programs to provide assistance to the mining industry?

[Resource Industries, April 24th, 2001]

Mr. Chairman, I have listened to the hon. member for Joliette. I appreciated his speech, because it is an excellent one. He knows his business. We know this dates back more than 18 years to 1982. After a thorough investigation by the U.S. department of commerce, Canada concluded that stumpage fees did not represent a subsidy on which any action could be taken.

It is also important to say, as I read in the Quebec Lumber Manufacturers Association's press release, that the association remains confident in its capacity to demonstrate the inconsistency of the allegations advanced by the American coalition in connection with the lumber issue.

The hon. member raised all the elements of the issue and perhaps he could once again remind us of them in just a few words. There is talk of a quota system for certain provinces, but much harm has been done by the quota system in certain provinces, particularly Quebec, in the resource regions, the remote regions, particularly to the small sawmills. Does the hon. member agree?

[Resource Industries, April 24th, 2001]

Mr. Chairman, my question is for the minister.

We know that there is an economic development agency in northern Ontario called FedNor. We also know that Abitibi—Témiscamingue is a resource area similar to northern Ontario which is being supported by FedNor.

Would it be possible for FedNor to get involved in northern Quebec? We have been going through a decline in the past three years. Could FedNor get involved? If not, could a new agency be set up to provide assistance to northern resource areas?

[Mining Industry, April 24th, 2001]

Mr. Speaker, on April 18, 2001, the Liberal member for Outremont and minister responsible for the Economic Development Agency of Canada for the Regions of Quebec announced a total of $1.1 million in Government of Canada funding to Quebec's mining industry, specifically to Corem and to the Quebec Mining Association.

The initiative provides Corem with considerable hope for the future and dovetails perfectly with the objectives of the Government of Canada: the creation of quality jobs and of an economy focussed on state of the art technology and export markets. As for the mining association, it will use the funding in 2001 and 2002 for a travelling exhibit on the mining industry called “From Ore to Metal”.

Through this contribution we wish to help the industry set up a project to raise public awareness of the importance and diversity of minerals in our lives and of the economic spinoffs of mining activities that respect the ecology and environmental standards.